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Leidy Project Work Delay Costing Transco $125K Per Day

A delay of preliminary work on its proposed Leidy Southeast expansion, which is designed to relieve capacity constraints in the Marcellus Shale while serving local distribution companies along the Atlantic Seaboard, is costing Transcontinental Gas Pipe Line Co. LLC (Transco) $125,000 per day and threatens to push back the project's scheduled opening, the company said.

"The in-service date contracted with the project shippers (including local gas distribution companies) is December 1, 2015, which coincides with the beginning of the next winter heating season," Transco said in a filing at FERC [CP13-551]. In order to meet that deadline and satisfy its contractual obligations, Transco obtained from the Federal Energy Regulatory Commission necessary authorizations for work, including "nonmechanized tree-felling on the pipeline right of way, which must be completed within the very limited time window of March and the first week of April 2015 in order to be protective of threatened and endangered species as per the direction of the U.S. Fish and Wildlife Service."

Tree-felling and other preliminary work had begun, Transco said, when the Delaware Riverkeeper Network (DRN) obtained a temporary stay to bring the project to a halt (see Daily GPIMarch 13).

"Transco is incurring a cost of $125,000 per day to keep the construction crews on stand-by during this stay," Transco said. "More importantly, to meet is in-service contractual commitment to provide gas by the next winter heating season, Transco must immediately be allowed to resume tree felling. Otherwise, it will miss the narrow time window allowed to complete this essential preliminary work before moving forward with other construction of the pipeline and it will suffer serious reputational and financial damage."

The company argued that DRN has not met the burden required to justify a stay and asked that the group's petition be denied.

DRN last week said it had filed a petition of writ in the U.S. Court of Appeals for the District of Columbia Circuit seeking an emergency stay of a FERC notice to proceed with tree felling activities "to give the court sufficient opportunity to consider the merits" of the Commission's Dec. 18 approval of the project (see Daily GPIDec. 18, 2014).

Last year, in a case led by DRN, the U.S. Court of Appeals for the District of Columbia Circuit ruled that FERC "impermissibly segmented the environmental review" of Tennessee Gas Pipeline's Northeast Upgrade Project and remanded that case to FERC "for further consideration of segmentation and cumulative impacts" (see Shale DailyJune 6, 2014). Environmental groups had argued that FERC had violated the National Environmental Policy Act when it segmented its review of the project, giving no consideration to it in conjunction with three other closely related projects, and claimed that FERC failed to provide a meaningful analysis of the cumulative impacts of the projects.

"Approval of the Southeast Leidy Line is a clear violation of the federal court ruling the Delaware Riverkeeper Network secured July 2014 that instructed FERC to stop engaging in segmentation of pipeline projects, the breaking up of larger projects into smaller pieces for review and approval," said Maya van Rossum of Delaware Riverkeeper.

Earlier this month, FERC gave Transco permission to begin partial path service on the proposed Leidy Southeast expansion, which would create an additional 525,000 Dth/d of capacity from Transco's Leidy line in Pennsylvania as far south as Choctaw County, AL (see Shale DailyMarch 3).

The project, which is expected to cost $607 million, includes constructing about 30 miles of 42-inch diameter pipeline looping in Pennsylvania and New Jersey, the net addition of 71,900 hp at four existing compressor stations, and minor modifications to meter stations and associated facilities.

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